British Bank Lloyds Acquires £19 Billion Pensions Business

Lloyds bank has agreed terms with Zurich to acquire for an undisclosed amount its United Kingdom workplace pensions and savings business, a division that presently has up to £19bn assets under management (AUM).

LBG director and Scottish Widows chief executive Antonio Lorenzo said: "The acquisition of Zurich Corporate Savings complements Scottish Widows' growth to date and provides us with an ideal opportunity to accelerate our goal to become a market leader in this important sector for advisers and customers".

As part of the deal, Zurich will gain distribution rights for group life protection to some of Lloyds' corporate clients, the bank said.

Scottish Widows presently has £124bn AUM, of which £35bn is workplace pensions business, so this represents growth of up to around a half in one stroke.

Reuters noted in its coverage of the news that bankers have also speculated that Scottish Widows and Standard Life Aberdeen (LON:ADN) could form an insurance tie-up, with Lloyds being a major shareholder in the FTSE 100 giant.

The acquisition will also allow existing Scottish Widows workplace pension clients to access "assets not previously available via Scottish Widows". "The greater proposition choice created through this acquisition will help us meet adviser and customer demands and ensure we continue to evolve our service proposition so that we are easy to do business with".

As part of the deal, around 200 Zurich employees, mainly based in Cheltenham, Gloucestershire, are expected to transfer to Lloyds.

The bank did not disclose the price of the deal but said it expects it to "partially close" in the first quarter of 2018, followed by the transfer of assets, subject to regulatory approval. We are simplifying our organisation and focusing on markets where we have strong assets and can best serve our customers and distributors.

Scottish Widows, based in Edinburgh, is to take over the United Kingdom pensions and savings division built up by Zurich.